The U.S. Dollar was able to maintain its position against the yen and euro succeeding the announcement of positive U.S. Non-Farm Payroll metrics issued last week albeit the fact that economist were speculating that it would come in at a much higher position.
Risk sentiment progressed across the markets days following the ECB announced new ways to boost the region’s economic expansion and ward off the possibility of entering into a period of deflation. On the commodities point of view, Gold prices ticked to the upside despite its gains were pushed to the edge because of a rally in equities markets which limited the appeal of safe havens. Furthermore, futures for the second quarter were traded at $1,254.80 on Comex which remained at a four-month low over the past week.
In Europe, new approaches were announced by the ECB continued to overlook the headlines. The euro slumped to a session low against the greenback as investors are gauging the differential policy position between the Fed and the ECB.
Spain’s 10-year bond declined 2.6 % which was lower than the U.S. equivalent while Ireland’s yields also came a season low along with Germany respectively. The British pound remained relatively much lower against the U.S. currency but still handled fairly well to rise a few pips on prediction that the coming week’s labour data could point to the possibility of a rate hike by the Bank of England. Economists are apprehensive of the fact that salaries have not kept up with the demand in employment which is a vital factor that could determine how soon the central bank would opt to consider a change in its monetary policy.
The yen depreciated against the much higher-yielding dollar yet Japan still managed to post a better than expected growth report for the preliminary quarter of the year. In the South Pacific, the Australian and New Zealand currencies were boosted by vital macroeconomic fundamentals out of China which indicated that the world’s biggest economy is gaining momentum.
AUD/USD: At its peak in three weeks
The AUD/USD soared to a peak in three weeks as risk aversion diminished in the markets. In the South Pacific, official news issued in the past few days indicated that the economy grew at 1.1 % in the months of January through March. The commodity related currency was also boosted by the ECB’s decision to augment stimulus measures. In the coming weeks, all eyes are centred on the important fundamentals such as housing loans, consumer confidence and among others. The AUD/USD benefitted from positive news that exports rose while imports declined.